Amazon at Key Support on the Weekly Chart

Amazon (AMZN) is at the first of two important trend line support levels. The weekly chart shows the stock price testing, for the third time this year, a long term uptrend line drawn off the lows since 2012. It fell through that support during the two previous tests but managed quick recoveries. A closer look at the same chart also shows the formation of a large symmetrical triangle over the last six months, with the uptrend line being the second key trend line. The dashed red line dissecting the triangle is a regression line, or best-fit straight line of closing price within the pattern. The uptrend line, the 10 week (50 day) moving average, and the regression line are all intersecting, and a violation of this area takes out the first key level of support.
Another break is less likely to see a quick recovery this time, and more likely to initiate a test of the triangle uptrend line, and a breakdown from pattern support projects a significantly lower price for Amazon stock. The price and money flow momentum indicators are still trending higher, but keep an eye on those support lines because indicators lag price.